Key Assumptions
Some basic and critical assumptions underlie the approach, and each assumption has consequences for how both purchasers and providers work within the system and relate to each other.
1. Results Matter
Results define success for any organisation. In Outcome Funding, results are defined in terms of changes in the behaviour or condition of the people the organisation serves. Results are not what a provider does.
For purchasers that means far less concentration on inputs and far more emphasis on how many people "get better" (even if the number who do is small). It means deciding who gets funded on the basis of the results predicted and the likelihood that results will be achieved. It means asking for reports, not on what project implementers do or did, but on how their customers/clients are changing.
For providers of services it means a commitment to following the work plan - only as long as it gets results - and to continuous change, until the point that what is done results in the change that is sought. It means a willingness to predict a level of accomplishment - not activity - and commit to that level.
2. Partnership between Funder and Implementer
The notion of ‘contracting' has often led to deep levels of mistrust and inflexibility between purchaser and provider. Partnership means a joint commitment to success, a willingness to help if one of the parties needs assistance, supported by clear communication.
For providers it means a willingness and ability to be honest and open but ambitious in terms of the level of results which can be achieved, and a readiness to admit problems and ask for assistance.
For purchasers it means a willingness to allow providers to define the results and a commitment to allow them the flexibility they need to achieve those results.
For both it means trust; a deep belief that each party is doing what they say they are doing and honouring the commitments made to each other. For starters, it means clarity.
3. New Thinking
This is a new mindset - new thinking is involved. Because we think in words, new words are required. Clear words and firm definitions are needed.
Clarity for both purchasers and providers is crucial. Both, for example, must understand that the words "Performance Target" mean a change in the customers (a result), not a measure of inputs (treatment sessions) delivered etc.
People make things happen, they get results. They are the single most important piece in the whole equation.
For the purchasers this means a concerted effort to judge the capacities of the people who get their money, and a willingness to ask probing questions about them and their relationship to their services and projects. It also means comfortable reliance on a few people to make grant decisions, not throngs with numerous back-up reviews.
For the provider it means a willingness to allow those probing questions to be asked and to answer them, and a desire to have themselves connected to the results they propose to deliver, ie. to be accountable.
4. Action, Change & Learning are Keys to Success
Outcome Funding assumes that planning is not enough, and that projects which receive grants need to rapidly get to action, even if it means some mistakes.
It is only through mistakes that learning and change can happen.
For purchasers it means that a change in the original "work plan" and even a change in the "service" is not only acceptable, but is to be encouraged if results are not forthcoming.
